Economic disarmament

Tomorrow morning we are going to list ten reasons to vote Conservative at the next General Election.  There are many reasons to be enthusiastic but the party's economic policy is certainly not going to be on our list of ten.  A little while ago we warned against the 'politics of small promises' as the route to restoring voter trust.  On economic policy our promises couldn't be smaller.  This is what David Cameron told BBC1's Politics Show earlier (hat tip to Iain Martin for identifying it):

“I cannot sit here and promise we’re going to cut the cost of living and make everything easier for Britain’s families. But what we can do is say we will stop making it worse.”

There is a good political argument for disarming Labour economically.  By matching them on tax and spend it will be hard for Labour to paint us as economically irresponsible.  The strategy might work electorally if the tortoise position on economic issues is coupled with hare-like boldness on crime and schools, for example.  But the tragedy is for the British economy.  We are sliding down the economic competitiveness league table.  The state is squandering the resources it has gobbled up in recent years.  The real disposable income of millions of Britons is flat or falling.  And there is not one single political party pledged to change course in a serious way.

But with that depressing message, good night.  There will be sunshine on ConservativeHome in the morning.  That positive list of ten reasons will be posted by 9am.

Comments

[michael mcgough]

Eleven hours to save the Conservative party.

[bluepatriot]

The Tories are frightened of Labour 'you will cut public services' attacks. They have decided to neutralise the one big card that Brown could use against us.

[Constance MacDoogle]

I do wish Mr Cameron would pay more attention to NuLabours election winning strategy.

Tony Bliar said "we will not raise taxes" knowing full well that he would do just that.

Mr Cameron should do the same thing in reverse. Say "we will lower taxes" even if we can't.

If we are able to keep the promise the voters will reward us with a 2nd term. If we can't we simply argue that Labour will put them up even higher (tax bombshell).

It's a strategy thats worked before (winning 4 general elections). I don't see why it wouldn't work again.

[Margaret Hemmings]

For heavens sake I just want to pay less tax.

What is the Conservative Party for if it is not to reduce my tax bill.

The governments budget must be over £100 billion pounds. Surely DC and GO can trim a couple of billion from that budget in the 1st year and give it back to entrepreneurs like me.

We are the backbone of this country.

We need a flat tax. I have no wish to pay higher rate tax to subsidise the working/lower middle classes.

If you want to earn more pull your socks up and do some work. Don't expect the government to cradle you for your entire life.

[Malcolm Dunn]

'The governments budget must be over 100 billion pounds'. You don't know much about the nation's economics do you? It's more than four times that. 'We need a flat tax'? You don't know much about economics do you? There is not a sophisticated capitalist country in the world with a straightfoward flat tax. Chancellor Merkel looked at the idea in the last German election it nearly cost her victory and she was forced to back track.
'I just want to pay less tax'.Don't we all? But when this country is borrowing spectacularly large amounts as it is at present to finance tax cuts from borrowing as they've done in the USA will simply lead to bigger problems later.
Unlike the Editor,I think the honesty of Philip Hammond is both right and will be politically attractive in the coming months.

[Tony Makara]

I'm very disappointed that the party leadership hasn't the bottle to take on the Labour government in the battle of ideas over the economy. The Conservative leadership is allowing the Labour government to set the agenda, to set the rules by which the game is to be played. We are being taxed too much and government spending is wasteful, so why does the party leadership not want to argue the case and spark debate among the wider public? I want to see a change of government at the next election and that means a changed economy too. Expecting voters to support more of the same is just not good enough. I'm particularly worried that the tax burden on business is going to have dire effects as we enter a serious economic downturn. Consumer demand too will suffer because the credit has dried up, so people will need access to more disposable income and that can only come through tax cuts. I'm glad that Conservative Home is banging the drum loudly over this issue. Labour must not be allowed to set the agenda for the next election. Tax cuts must be a fundamental part of Conservative party policy.

[ChrisD]

"'I just want to pay less tax'.Don't we all? But when this country is borrowing spectacularly large amounts as it is at present to finance tax cuts from borrowing as they've done in the USA will simply lead to bigger problems later.
Unlike the Editor,I think the honesty of Philip Hammond is both right and will be politically attractive in the coming months."

Thank god for some common sense Malcolm!
I want tax cuts, but the levels of public debt we face should have alarm bells ringing all over the place. That debt has got to be reduced from its present danger levels first before we can even contemplate tax cuts.
It makes sense if you want to be honest and more importantly trusted. The Conservatives have to undermine Brown and his stewardship of the economy. You don’t sound credible if you say the economy is in a mess and Gordon Brown continued borrowing and spending leaving us with a huge debt hangover and no surplus safety net. But, what the hell, here, have a tax cut!

The voters would ask two questions, how can you afford it, and what has to be cut to achieve it immediately? Labour will do a nice set of posters making wild predictions about nurses being thrown on the dole queue because they get to use the big shiny Treasury calculator which never lies etc etc.
Honesty and coherence = trust.

[MrB]

Why can't we optimisticallly assume that once in government we will actually deal with this differently to how we said we would?

Most governments run the country completely differently to how they promised anyway so it doesn't seem like such a stupid assumption!

[Christian May]

Surely the point is that we're going to inherit one hell of an economic mess - so how we can promise tax cuts from day one without getting things in order first? Labour will never stop calling proposed tax cuts 'an attack on public services' so it's poliitically prudent to take the line that "we'll sort their mess out, then lower taxes."

[Scottish Tory boy]

We started off the day with great headlines of phenomenal poll lead, and now the day ends with in fighting. Well done Conservative Home for stoking up the matter, and Tim Montgomerie by giving unfavourable interviews to the BBC....united we stand, divided we fall; we forget that at our peril!

[Geoff]

Christian is right. Even suggesting slowing down the growth of the State will leave us being accused of wanting to string up nurses from the nearest lampposts.

We are going to inherit a huge mess as we know, so it is going to have to be medicine first and then jam tomorrow.

[ChrisD]

Scottish Tory boy, not seen the Beeb interview, can you elaborate?

"united we stand, divided we fall; we forget that at our peril!" The Portillo programme on the Thatcher years brought that home very clearly!

[Keith Muir]

Some of us Scottish Tory Boy seem only interested in being in government.

Others of us want a government worth having.

[Christina Speight]

Your ten reasons had better be good enough to drown out the xx reasons for not bothering to vote at all

1. An economic strategy that mimics Labour's calamitous strategy
2. A refusal to spell out our intention to get taxes down definitely because that's our belief. OK we'll inherit a mess but the intention can be spelt out.
3. Refusal to meet the wishes of 79% of Tory supporters and really sort out once and for all our dreadful position vis-a-vis the EU
4. A lack of any coherent 'umbrella' philosophy to show where the party stands and where it wants to go - a THEME.

[Bill Brinsmead]

In the recent past Tim Montgomerie has had a piece in The Guardian, has had a biased small sample survey cited by the Today Programme, was seen talking to Michael Crick at Gateshead and gives an interview to BBC News – 10.00pm tonight. Why give ammunition to media outlets that are hostile to the Conservative Party?

Give it a rest Tim.

[Scottish Tory Boy]

there is a difference between working together and trying to influence on the inside, and creating bad headlines and reinforcing that divided image that pushed us out of office in the first place.

I am not a 'do all, say all' kind of politician, and do have certain differences of opinion on some matter, but to see such a figurehead of Conservative activists publicly attacking the party leadership does leave a bitter taste in my mouth....especially when i and other like me spend so much time working hard on the ground to change those preconceptions

[Northernhousewife]

Tories, ALL Tories want tax cuts but we may be two years away from an election.
This leadership have done OK so far.
Get off their backs.

It we announce them now, before as POSSIBLE recession, 2 years away from an election, before we even know what position we will be in would be the height of stupidity, and the electorate would know it.

Your approach and tone [not to say your graphics]on this has made me quite angry. We walk the streets [today!] whilst you undermine us.
Sometimes a leadership has to lead and a party has to allow that.
You have made your point. Fine, but eventually the cost of repeating yourself becomes too high.
Now in Bill's words, give it a rest.

[Richard North]

If, as seems very likely, we are going into recession, tax incomes will fall as a function of reduced economic activity. But any decline will also change the balance of advantage on the Laffer curve, tilting many of the taxes over the hump (some are undoubtedly there already).

Therefore - counter-intuitively - the best way of preserving tax incomes is selectively to reduce taxes and thus boost economic activity. Keeping them as they are is not a sensible option.

Tim, therefore, is completely right in advocating tax cuts - a policy which one would expect of an economically literate Conservative Party.

[Northernhousewife]

Economic literacy doesn't matter a jot if its sitting on the Opposition benches.

A bit of political literacy wouldn't go amiss.

[anonymouse]

As one of the overtaxed and lower paid you just lost my vote.
Bye............

[Richard]

We need tax cuts to give the economy a boost and thus plug the gap in public finances.

Or we need to plug the gap in public finances before we can afford a tax cut.

Chicken or egg scenario. The solution? Cut taxes but cut spending by more.

[Henry Cook]

I am surprised at the averse reaction to the Hammond comments. Think back if you will to the first Thatcher parliament - the public finances were in such a bad state in 1979 that a reduction in the tax burden was simply impossible in the first term, and unfortunately it had to rise significantly. The real 'tax cuts' came under Nigel Lawson as Chancellor, but this did not mean that Geoffrey Howe was any less of a Conservative. In 1979, the overriding Conservative message on fiscal policy was 'pay as you spend, not pay as you earn', referring to the great tax shift from direct to indirect taxation. The Conservative position in 2008 is remarkably similar - 'tax the good not the bad' has been used once or twice I think, and we will see a similar 'tax shift' from taxing families and businesses to taxing pollution and other 'bad' things.

The Budget deficit is in such a terrible state that Osborne and Hammond really have 'no alternative' besides prioritising sound money over tax cuts, doing as Conservatives have done many many times before. It will be a bitter pill to swallow, but the medicine is badly needed.

[m wood]

It is realistic to admit that taxes can't be cut for some time, given the mess that Labour will leave behind them. But surely we can reassure people by pointing out that 'Conservative Governments have always taxed LESS than Labour and that the alternative is another Labour Government that will certainly raiuse taxes even more!'

[Goldie]

I have only one thing to say to the gentlemen on the Conservative front bench:

grow a spine.

Try to remember you are of the party of Churchill and Thatcher.

[James Burdett]

Frankly I think that David Cameron is spot on in this. Labour and Brown will be waiting for any opportunity to paint us as slash and burn on public services, irrespective of the truth. Going down a route of bolder tax cuts wouldn't just change the dynamics on the economy it would demolish the Party's progress on Health, Education and other areas of social policy. The party would be kicked to death over it with glee by Balls and crowd. Now the attack would probably have less potency than before but it would still have traction with enough people to damage our chances. After more than a decade I think if we haven't learnt that it is better to be cautious in opposition so you can be bold in office then we really are in the remedial class, the proven fact is that if you are too bold in opposition you never get a chance to be in office!

[Editor]

Some are saying we can't afford tax cuts.

It's not about affordability but about priorities.

Our Treasury team have decided to prioritise 2.1% growth in public spending; leaving no room for reduced borrowing or tax relief.

We could afford tax relief we called for a slowdown in the growth of Labour's state.

PS I make no apology for what I've said on the media. I'm representing the opinion of the 79% of members who want a combination of tax relief and slower growth in spending.

[James]

"What is the Conservative Party for if it is not to reduce my tax bill." (Margaret Hemmings).

I fear that some Conservatives have a very narrow view of the Party. It is about considerably more than just a narrow, tax cutting party and always has been.

Conservatism did not begin in 1979!

(I speak as a fervent advocate of lower taxes - but not blindly, not regardless of Govt debt levels, and not as some sort of stand alone policy. It needs to be well thought out, add up, and be sold to those who are concerned about govt spending cuts (as some are)).

[michael mcgough]

Well said Ed..

[ToryJim]

Posted by: Henry Cook | March 17, 2008 at 00:45
The Conservative position in 2008 is remarkably similar - 'tax the good not the bad' has been used once or twice I think, and we will see a similar 'tax shift' from taxing families and businesses to taxing pollution and other 'bad' things.

...err, could you be a bit more specific about which 'bad things' you think we should tax more heavily? Coal-fired power stations? (BTW, in that context would you rate nuclear power as 'good'?)

Do we support (yet) more duty on alcohol and tobacco?

More duty on fuel? [boggle]

It's worth bearing in mind that "pollution and other 'bad' things" don't just happen on their own, often families and businesses are involved...

[Richard]

As I said in an earlier post.

Lower taxes should not be seen as a desirable extra when times are good; they are a prerequisite for a sound economy. Low taxes encourage people to work, save and invest and if you keep tax rates down the economy grows more quickly. Low taxes also reduce both the opportunity and the incentive for tax avoidance so revenues increase. At the last general election the Liberal Democrat Party said they wanted to raise the top rate of tax for 40% to 50% to raise extra money for public services. The Conservative Party when in power was able to generate the same amount of money by lowering the top rate of tax from 60% - 40%. If people pay less tax, and keep more of their own money, they have more incentive to work and unemployment falls as new jobs are created. Low taxes also make Britain a more attractive country for inward investment which in turn generates jobs and income.

High taxes only serve to penalise the successful while providing little incentive for those on less money to earn more. In the end high taxes make us all poorer, as Dick Cheney recently remarked, “no nation ever taxed its way to prosperity”.

The saying goes that nothing is certain in life apart from death and taxation; we are born free then taxed to death. If the traditional believers in lower taxation – the Conservative Party will not make the case for lower taxes then organisations like The TaxPayers’ Alliance must because low taxes do not just make economic sense they are a moral imperative.

[bexie]

It is telling that once the higher rate of tax fell under Mrs Thatcher then the revenue gained from them rose.

There are several things that could be done. Stop funding all the "charities" that are little more than NuLab propagandists and lobbyists. That should save some.

Simplyfy some taxes. National Insurance is a good case in point, a whole department that more or less duplicates the work of the Inland Revenue. Just get rid of it.

We should have a firm target to reduce the take of governmen from its current rate of 45% or therabouts to below 40%. As Richard/ Dick Cheney said, “no nation ever taxed its way to prosperity”. Reduce the share of GDP and the economy will start growing again.

[passing leftie]

PS I make no apology for what I've said on the media. I'm representing the opinion of the 79% of members who want a combination of tax relief and slower growth in spending.

Posted by: Editor | March 17, 2008 at 07:09

Please do keep this up. With "enemies" like you...

I doubt that Cameron will be stupid enough to go into the next election with the same failed approach which lost you the last three, but I live in hope. If you combine that with a promise for a retrospective referendum on Lisbon, that would be the icing on the cake.

[smallbusinessowner]

I frankly could not believe my ears when I heard the "announcement" by Philip Hammond that the policy for the next election is NOT to reduce taxes. It not only strikes me as a very lazy policy, simply to say we will continue on as Labour are doing now (er,the reason why we are voting them out) but it is a smack in the face for your supporters desperately waiting to hear of some form of taxation relief - anything!. I also commend Mr Cameron to include some of the sensible reforms John Redwood has put forward for business. Just tell us what you will get rid of. Much more demonstrative policy is needed Im afraid - the Hammond announcement yesterday has backfired terribly. In simple marketing terms, inject some competitive differentiation on tax ASAP!

[Ken will be seen as a goldern era]

COMMENT OVERWRITTEN.

[Eleanor McHugh]

As Conservatives we would all like to see tax cuts: it's morally objectionable that when people work hard the heavy hand of government should come along and take a large proportion of the proceeds for often dubious uses.

The left of course argues that this allows for redistribution of wealth to those who through misfortune or lack of opportunity are unable to support themselves. Frankly there are people who without the help of the rest of us would starve, and at that most basic of levels it's hard to argue against at least some level of redistribution without sounding heartless.

However the fact is that the majority of the taxes which New Labour has introduced have nothing to do with this arguably laudable goal. Instead they take hard-earned money from families who over the last decade have been driven to increasingly fund the basics of life from costly consumer credit because once you take the current level of personal taxation and add the genuine input costs of earning the money that is being taxed you find that an increasing portion of the middle class is joining the working class on the poverty line - they just don't realise it yet.

As a result it is imperative that the level of personal taxation be reduced at the earliest possible opportunity.

Unfortunately Gordon Brown's spending sprees have left the public purse in such a parlous state that a Tory government inheriting this mess would be hard pressed to reduce taxes without reducing spending. And there we find ourselves pulled back onto New Labour's natural battleground.

They have convinced the British public that ever-higher spending is the only way to help the poorest in our society, even though their actual ability to do so has been negligible, and until we can break the automatic correlation between Spending and Social Justice we have little chance of convincing the electorate that this trend must be reversed.

So whilst we know that low taxes and small, efficient government are the ideal we should all aspire to, we are not in a position to gain the opportunity to put our beliefs into action unless we can first get back into government and prove our competence.

Personally I'm pleased to see David Cameron focusing on areas where New Labour is increasingly vulnerable such as its attitude towards the family. These may not excite the economically minded, but reaching out to the millions of households who've seen their savings evaporate and their debts multiply in recent years is the way the party will get back into power. And getting back into power will allow us to deal with the mess we inherit, with the full support of the British electorate.

In the meantime calling for tax cuts as the economy nosedives into recession will make us look an even more dangerous proposition to the voters than the government of the talentless that we're seeking to replace.

[David Belchamber]

There is quite a lot of negative waffle going on about tory policy on taxes.

Can we not state positively (i) the conservatives are traditionally the party of low taxation but (ii), as David Cameron pointed out recently, after 11 years of Labour the cupboard is bare again as it generally is after years of a Labour government (vide Henry Cook at 00.45: "the public finances were in such a bad state in 1979 that a reduction in the tax burden was simply impossible in the first term, and unfortunately it had to rise significantly") but this time (iii) because Gordon Brown has wasted so much of our money in that time, we can promise "to share the proceeds from the reduction in government waste...." purely and simply by means of (iv) governing competently and (v) simplifying the tax system.

We could also promise to match Labour spending for a limited period on key and emotive areas such as education and the NHS but say that elsewhere we can no longer spend beyond our means in the profligate way that Brown has.

[Jack Stone]

When the party was kicked out of power in 1997 the public thought of it as the selfish party, the party that represented the me society and the party that knew the cost of everything but the value of nothing.
David Cameron as changed that impression. He as talked about things other than money. He as said tax cuts will not be put before our public services.He as said its not about me any longer but us.
If you start promising tax cuts all the good work David Cameron as done will be undone. People will start thinking the party doesn`t care about public services, that it only worries about money and its once again the selfish party.
David Cameron`s way is the right way to win the next election and govern Britain. Mr Montgomery`s way and many who post on this sites way is the way for another Labour landslide!

[Sean Fear]

Where do you think tax money comes from Jack? What is selfish about allowing other people to retain what is rightfully theirs? And what is good about compelling them to part with what is rightfully theirs?

[Laffer Curve]

If the Tory's can't find any exces to cut in a £ 600 billion plus budget, then they should just give up.

The state's take has gone from @37 % of GDP to nearly 45 % under labour and according to the dripping wet clown Hammond, that quite all right...

The Laffer Curve works, saying it doesn't is flying in the face of reality.

Labour is about to prove beyond any shadow of a doubt, that high taxation ultimately kills the economy and all that Cameron can do is ape that idiocy.

[Laffer Curve]

Sean Fear

People like Jack think politicians can spend our money better than we can. They also believe in the Tooth Fairy and probably think that's who pays the tax, as well.

No wonder MP's take it down to John Lewis and spend it on themselves.

[David Giles]

Laffer Curve is quite right.

Tax reductions and in accordance with Laffer Curve principles have stimulated the economies of the USA, Canada, Australia, New Zealand, Ireland and many European countries at the same time Blair/Brown/Darling have been massively increasing the tax burden in the UK.

However public expenditure also needs to be controlled. My own view is that the vast majority of present MP's are unqualified to do this and need to be replaced at the next General Election - and I am not talking just about Labour and Lib Dems either but the many Tory MP's who are now institutionalised Socialists, feeding at the trough of taxpayers' money.

The failure of the present House of Commons to control the scandal of MP's expenses in my view should disqualify all MP's who have taken part in this disgraceful and secret conspiracy against the taxpayers from standing at the next General Election.

Local Conservative Associations simply must ensure that our MP's and candidates are dry and sound on economic policy and not merely careerists opting for a blue rosette now that the tide is turning blue.

We need massive tax cuts and a 10% cut in public expenditure as soon as possible.

[Editor]

Jack: If tax relief is focused on poorer voters I'm not sure that that would make us look selfish amongst reasonable people.

[Jack Stone]

You have got to convince people that tax cuts will not mean cuts in public services and I am afraid that the party will not be able to do that until it gets into power and convinces the public that it can run public services better than Labour can.
When we have hospitals stretched to the limit, too many failing schools and not enough police officers it is selfish to want tax cuts that cannot be funded without cuts in front line services and I am afraid that is the case at present.
What is the point and I go back to this time and time again on this site of a political party advocating policies that will mean it will lose support not gain it and I am afraid tax cuts are one such policy.
Without power a political party is little more than a debating society. I am afraid if the leadership listen to this site the party will continue to be just that.

[Northernhousewife]

Steve Richards..The Inde....

For David Cameron and George Osborne, the verdicts of the weekend's polls vindicate their strategy of not dangling tax cuts in front of the electorate at every opportunity. Of course, two fleeting polls are not the end of the matter and they will continue to face pressure from within their party and from influential websites and newspapers.

I remember Tony Blair, an astute and over conscientious observer of his opponents, telling me a few years ago that the Conservatives were ill-served by "their newspapers". He explained that in the 1980s the few Labour supporting newspapers urged the party to move to vote winning positions, while from 1997 the Tory papers tended to propel their party rightwards towards electoral oblivion. At least now Mr Cameron has the protective shield of high poll ratings to resist falling into another tax cutting trap.

Over to you Editor